Recently, more and more companies are procuring their electricity from renewable energy sources as a part of their sustainability strategies. At the same time, such state support system for renewable energy producers as feed-in tariff has been becoming unreliable in Ukraine, as investors are increasingly faced non-payments for the “green” electricity delivered to the grid. With this in mind, the application of corporate PPAs - long-term agreements for purchase and sale of electricity between a renewable energy producer and a business entity as a corporate buyer, could promote the further development of renewable generation in the country.
On 13 September 2021, the Ukrainian Wind Energy Association, jointly with Sayenko Kharenko, a law firm, member of the UWEA, and in cooperation with AHK Ukraine, hosted the international webinar devoted to the prospects of implementation of corporate renewable PPAs in Ukraine.
During the webinar, high level experts from the EU and Ukraine covered a wide range of issues, in particular the experience of corporate PPAs’ application in the EU, Poland, Germany, financing of corporate PPAs by banks, the legislative initiatives of the Ministry of Energy of Ukraine, specifics of electricity pricing under corporate PPAs’ and necessary amendments to Ukrainian legislation for their application.
Andriy Konechenkov, Chairman of the UWEA Board, in his opening speech said : “Considering the current status of renewable energy in Ukraine, there is an urgent need for new renewable energy support mechanisms to be introduced in our market. Corporate PPAs, contracts for difference are exactly those mechanisms that could increase the “green” generation , in particular from wind energy. Such approach is aligned with the principles of “green” transition followed by the EU countries.”
Hannah Hunt, Impact Director, RE-Source, European platform for corporate PPAs, provided the European corporate PPA market overview with both procurement and policy trends, including important improvements for corporate PPAs which are envisaged with the EU’s recent Fit for 55 package release, presented examples of different types of corporate PPAs concluded by the European companies.
Olga Yeriomina, Associate Director, Senior Banker, Energy EMEA, Sustainable Infrastructure Group, EBRD, spoke about RES project financing based on corporate PPAs. In particular, Mrs. Yeriomina noted that concluding a long-term contract, for at least 15 years, and having a reliable corporate buyer are necessary for obtaining such financing.
Oleksandr Martynyuk, Acting Director-General of the Energy Markets Directorate, Ministry of Energy of Ukraine presented the legislative initiatives of the Ministry on the development of renewable energy sector under market conditions . Mr. Martynyuk paid particular attention to the issue of implementation of the contracts for difference in the market, which he considers a prerequisite for the further introduction of corporate PPAs in Ukraine.
Dan Cocker, Partner, Allen&Overy, specified the implementation of corporate PPAs in Poland, the structure of such contracts, and the issues to be negotiated when concluding a corporate PPA. In turn, Khrystyna Kasyanova, Head of Energy & Energy Transition Working Group, AHK Ukraine, told about main drivers for the application of corporate PPA in Germany and relevant experience of German companies.
Presentation of Maksym Semenyuk, consultant of DNV, a member of the UWEA, was devoted to electricity pricing under corporate renewable PPAs.
Summing up the discussion, Maryna Hritsyshyna, Head of Energy Practice, Counsel, Sayenko Kharenko Law Firm and Member of the UWEA Board, noted the main barriers for corporate PPAs to be implemented in Ukraine. In her case study she gave the example of an entity interested in purchasing “green” electricity and what such company need to do.
It became clear at the webinar, that RES producers are interested in implementing corporate PPAs in Ukraine and consider them as one of the opportunities to obtain financing for new RES projects which are not eligible for “green” tariff since 2022.
Webinar recording: https://www.youtube.com/watch?v=Gzoje0WeAK0